Port Hedland Iron Ore Exports Decline as Chinese Demand Wanes

By Phoebe Sedgman -
Jul 1, 2013

Iron ore shipments from Australia’s
Port Hedland, the world’s biggest bulk terminal, declined from a
record last month after exports to China dropped.

Exports totaled 27.7 million metric tons in June from 27.9
million tons in May, data on the Port Hedland Port Authority’s
website showed. Shipments to China decreased to 22.9 million
tons from 23.3 million tons.

Iron ore fell 26 percent from a 16-month high in February
on concern that expansion in China is faltering. Two gauges of
China’s manufacturing fell in June, underscoring a sustained
slowdown in the economy as policy makers seek to rein in
financial speculation and real-estate prices. Weaker gains in
manufacturing and a cash squeeze in the banking system add to
odds that Li Keqiang will become the first premier to miss an
annual growth target since the Asian financial crisis in 1998.

“Momentum appears to be easing,” Australia & New Zealand
Banking Group Ltd. analysts including Mark Pervan and Natalie Rampono wrote in a report today. “The third quarter tends to be
seasonally weak for industrial activity in China, so we remain
cautious on bulk demand near term.”

An official Purchasing Managers’ Index dropped to 50.1, the
lowest level in four months, from 50.8, the National Bureau of
Statistics and China Federation of Logistics and Purchasing said
yesterday. A separate PMI released by HSBC Holdings Plc and
Markit Economics was at 48.2, the weakest since September.
Readings above 50 signal expansion.

Goldman Sachs Group Inc., China International Capital Corp.
Barclays Plc and HSBC Holdings Plc last month pared their China
growth projections for this year to 7.4 percent, below the
government’s 7.5 percent goal.

Iron ore with 62 percent content delivered to the Chinese
port of Tianjin gained 0.3 percent to $116.90 a dry ton
yesterday, according to data from The Steel Index. The price
climbed to $158.90 in February.